Employee Retention Strategies.

 

    Employee retention is a phenomenon where employees choose to stay on with their current company and don’t actively seek other job prospects. The opposite of retention is turnover, where employees leave the company for a variety of reasons. Retention is defined as the process by which a company ensures that its employees don’t quit their jobs. Every company has a varying retention rate, which indicates the percentage of employees who remain with the organization during a fixed period. (Chiradeep, 2021)

Why Employee Retention is Important?

For employees to develop a sense of trust and dependability among one another, employee retention is crucial to team development and cohesion in the workplace.

When talented employees leave an organization, one of the biggest losses is diminished production and loss of competitive advantage. High personnel turnover rates can hinder an organization's ability to carry out its mission due to impairments to continuity, loss of institutional knowledge, and high expenses of replacing departing workers and training new replacements. Employee departures can also weaken morale and lead more employees to leave the firm.

The influence on clients who discover dealing with a constant stream of different individuals is another unfavorable consequence of turnover. Consumers are frequently alerted by high turnover that there is a problem with the company or brand. An employee retention strategy is paramount. It is not easy to find the right talent, one with the right education levels, skill sets, and other personality traits suited to your organization. Now, when employees want to leave after making all of this effort, it becomes even harder for an organization.

A strategic approach needs to be taken to understand:

• Why are employees unhappy?
• Why do they want to leave?

Why have some initiated their resignation, etc.?  (Sharma, 2023)

Why should HR leaders care about an employee retention strategy?

Retaining professionals–especially highly competent ones–is a must. Keeping people stimulated, engaged, and driven promotes:

• A high level of productivity 
• Business goal accomplishment
• Positive company reputation
• Reduced turnover and hiring costs

Why should an employee retention strategy be part of the modern HR strategy?

A strong retention strategy can satisfy people’s needs and improve the employee experience. Setting the external conditions can encourage professionals to stay at their jobs. In turn, this can generate a ripple effect, boosting engagement and productivity while also enhancing the company culture and brand reputation. 

What Is an Employee Retention Strategy?

An employee retention strategy or technique is a plan to reduce employee turnover. It helps prevent employees from leaving by finding ways to increase employee satisfaction.
Strategies to Retain Employees
Here are some of the employee retention strategies to reduce attrition and increase retention and employee engagement.

Employee retention refers to your organization’s ability to prevent voluntary and involuntary employee turnover, and an employee retention strategy is a plan a business develops and implements to reduce employee turnover rates. The employee retention program generally includes company policies and programs that help organizations attract and retain qualified employees.  (Chauncey, 2023)

The importance of an employee retention strategy.

High turnover rates can be expensive, inconvenient, and harmful to the overall success of a company. High employee turnover forces a company to spend resources to recruit, hire, and train new employees, and it can cost up to 33% of an employee’s yearly salary through both direct and indirect costs.

By targeting internal pain points such as workload issues, interpersonal challenges, or feeling undervalued, an effective retention strategy can provide numerous benefits. These include:

• Increased employee loyalty
• Reduced hiring, training, and staffing costs
• Improved morale and workplace positivity
• Increased productivity
• More skilled workforce
• Better brand reputation
• Enhanced customer experiences
• Improved employee experience

(Simplilearn, 2023)

Example 

How does Apple retain its employees?

Conducting 'stay interviews' (asking employees why they are staying) or why they would leave, is an easy but overlooked method of improving retention. The simple act of reaching out, and empowering people with a voice through sentiment-gathering feedback, makes them 4.6 times more likely to perform at their very best.

 Employee retention strategies for job satisfaction

While the job market in some industries and regions favors employers, candidates with in-demand skills likely won’t have to wait long to find a new opportunity. Many companies never stopped recruiting talent during the pandemic, and many others have picked up the pace of hiring in recent months.

If you sense your business is at risk of losing top talent, you need to move fast to shore up your employee retention strategies. Here are 14 areas where deliberate action can help boost employees’ job satisfaction and increase your ability to hold onto valued workers:

(HALF, 2023)

What are the best employee retention strategies?

Many innovative employee retention strategies can help you not only attract but keep your best performers. Let’s explore some simple steps you can take in your organization to reduce turnover. 

1. Start in the attraction and hiring phase

Employee retention begins during the attraction and recruitment stages. Make sure you have a strong employer brand that attracts the right candidates to your organization. Have a strategic recruitment funnel in place to make sure you are hiring people who have the right skills, characteristics, and values to succeed at your organization and drive it forward. 

It’s equally important to be transparent during the hiring phase when it comes to the working culture at your organization and the specific role in question to manage expectations and ensure you can deliver what you promise.

2. Strengthen your employee onboarding

New hires are generally always keen to integrate well into the organization, perform, and impress in their new roles. However, a poor onboarding process (or lack of one) can prevent new hires from knowing what they need to do to succeed and leave them feeling unhappy at work. 

The onboarding process begins as soon as your candidate signs their offer letter and only ends once they can autonomously do the role you hired them to do. So, it’s important to consider all key stages of the onboarding process: pre-boarding, the first day, the first week, the first 90 days, and the end of the first year.

3. Offer flexible work arrangements

Being able to work flexible hours to accommodate childcare or attend a hospital appointment in the middle of the day, will make employees feel like their needs are accommodated and considered, and that they are more in control of their time, even if they still work the same number of hours. 

Other work arrangements such as remote work, hybrid work, part-time, job-sharing and compressed workweek options can all greatly increase employee satisfaction without harming performance. 

Collaboration is essential in most organizations, so establishing some core “in-office” days, or encouraging employees to make their own decisions on when to work from home while making sure it doesn’t harm the collaborative values of the organization can both be effective compromises while helping employees maintain a better work-life balance. 

 

4. Create a compelling employee value proposition 

Your employee value proposition (EVP) is your unique offering as an organization to your employees. A compelling EVP considers important elements, including benefits, opportunities for growth, work-life balance, and organizational culture. Different things matter to different demographics of people, and it’s important to cater to these different groups and create an attractive proposition that helps you stand out from your competitors. 

5. Focus on employee development & career pathing

Naturally, you should only invest in training if it helps you achieve an organizational goal, however, training improves productivity, performance, engagement, satisfaction, and retention rates. Providing opportunities for further growth and development helps your employees feel valued, and see a future with you.

6. Prioritize total well-being

Work-life balance is a hot topic right now, and following the pandemic, employees are placing greater importance on their total well-being and striving for a healthier balance in all areas of their lives. Many people are opting for part-time roles or opting to work for organizations that make their well-being a priority and don’t encourage a toxic, “hustle” culture where hefty workloads and impossible deadlines must be met at all costs. 

7. Offer fair compensation and benefits

While different employees value different things in a job and place of work, compensation remains an essential component of any organization’s retention strategy. Even if an employee feels greatly valued at work, they are likely to look for another opportunity if they believe they are not compensated fairly for the work they do. 

It’s important to be transparent with your pay structure and create a simple pay policy to attract and retain the best people. It’s equally important to regularly assess industry compensation standards and have a strategy in place to reward your top performers, for example, bonuses and regular wage increases. 

8. Provide effective performance management

When done in the right way, performance management helps your employees understand what is expected of them so that they can work to improve and progress in their careers.

Effective performance management provides employees with learning and development opportunities, a greater understanding of the role they play in meeting organizational goals, and helps them see their progress at work and understand what they need to do to get promoted. It also helps them feel more valued, which in turn boosts engagement and makes them more open to receiving constructive feedback and doing what they can to improve. 

When an employee can clearly see their career path at your organization and understand how to progress, they are much more likely to stay. 

9. Recognize employee contributions

Organizations should actively encourage managers to recognize their team’s work and also offer department or company-wide recognition for those who go above and beyond and exceed all expectations. 

10. Foster strong management and leadership

Ensure that performance reviews account for management skills and offer regular training and coaching to managers of all levels, even more so for those who are new and in their first managerial position. 

(Jay, 2023)

Conclusion

Employee retention is a major concern for many employers; management teams of successful organizations have to realize the importance of retention of its most productive workforce. High turnover leads to the loss of valuable workers whose replacement is costly.

It is important to note that a high employee turnover is normally unhealthy for an organization’s performance as well as the productivity of other presumably loyal employees. Moreover, turnover affects the productivity of remaining employees since they may be compelled to perform duties of more than one person or allocated duties that do not match with their training.

Employee exit from an organization may be a subject of variant factors; however, although some are avoidable, other factors may be too strong for the employer to control. It is fundamental for employers to identify these factors and establish strategies for preventing their occurrence.

(Nassim, 2023)

References

Chauncey, 2023. 15 Effective Employee Retention Strategies In 2023. [Online]
Available at: https://www.forbes.com/advisor/business/employee-retention-strategies/
[Accessed 21 Nov 2023].

Chiradeep, 2021. What Is Employee Retention? Definition, Strategies, and Ideas, With Examples. [Online]
Available at: https://www.spiceworks.com/hr/engagement-retention/articles/what-is-employee-retention/
[Accessed 21 Nov 2023].

HALF, R., 2023. 14 Effective Employee Retention Strategies. [Online]
Available at: https://www.roberthalf.com/us/en/insights/management-tips/effective-employee-retention-strategies
[Accessed 21 Nov 2023].

Jay, S., 2023. 10+ Employee Retention Strategies for 2023 to Keep Your Top Talent. [Online]
Available at: https://www.aihr.com/blog/employee-retention-strategies/#author
[Accessed 21 Nov 2023].

Nassim, 2023. Employee Retention: An Essential Strategy for Business Success. [Online]
Available at: https://www.linkedin.com/pulse/employee-retention-essential-strategy-business-success-nassim-sadik/
[Accessed 21 Nov 2023].

Sharma, R., 2023. Employee Retention Strategy: Meaning and Benefits. [Online]
Available at: https://emeritus.org/in/learn/employee-retention-strategy-for-organization/
[Accessed 22 Nov 2023].

Simplilearn, 2023. Top 6 Employee Retention Strategies for Your Business. [Online]
Available at: https://www.simplilearn.com/employee-retention-strategies-article
[Accessed 21 Nov 2023].